Taki's Daily Blog
Barack Obama and George W. Bush seem to have come away from their study of the Great Depression with similar conclusions: To wit: After the Crash of 1929, the Federal Reserve did not move fast enough to save the banks and inject cash into the economy. Second, the New Deal, far from being wastrel deficit spending, was not bold enough. So … [Read More]
As the Federal bailout bonanza prepares to spread beyond the mortgage and financial sectors to fill Detroit’s depleted coffers, few economic or policy analysts have spared a thought for the destitution of the U.S. government itself. Put simply, our government doesn’t have enough spare cash to bailout a lemonade stand let alone a bloated and failing industry that is losing tens … [Read More]
Who killed the U.S. auto industry? To hear the media tell it, arrogant corporate chiefs failed to foresee the demand for small, fuel-efficient cars and made gas-guzzling road-hog SUVs no one wanted, while the clever, far-sighted Japanese, Germans and Koreans prepared and built for the future. I dissent. What killed Detroit was Washington, the government of the United States, politicians, journalists … [Read More]
Understandably, Republicans are seething. When Hank Paulson demanded $700 billion to haul away the trash in the dumpsters of JPMorgan Chase and Goldman Sachs—assuring us we could hold a garage sale of the junk—they rebelled. They acted as the nation, by 100 to one, demanded. They killed the Wall Street bailout. The Dow quickly sank another 1,000 points, and, charged with … [Read More]
Before the current economic crisis became apparent to all, the most popular fable used to describe America’s uncanny economic resiliency was the story of Goldilocks. It was argued that our economy was skipping down a sunny path of moderate growth, low inflation and rising asset prices. However, a much better parable for our economy over the last decade would have been … [Read More]
“Laissez-faire is finished, the all-powerful market that is always right, that’s finished,” said Nicholas Sarkozy, speaking ex cathedra, last month. As a result, said the diminutive French president, it is “necessary to rebuild the entire global financial and monetary system from the bottom up, the way it was done at Bretton Woods after World War II.” Sarky’s history is a bit … [Read More]
Over at Chronicles, Scott Richert comes to the defense of Tom Piatak and, referring to my last blog, accuses me of “individualism” and of not properly understanding economics. Unfortunately, in his justification of the proposed 25-50 billion dollar bailout of Chrysler, Ford, and GM, Scott stumbles into an economic fallacy or two along the way—and classic ones at that. Scott claims … [Read More]
In 1980, when the U.S. economy was last in serious trouble, Ronald Reagan offered the correct diagnoses that government was the problem and not the solution. His message resonated with voters, propelling him into the White House to implement an agenda of lowering marginal tax rates, reducing government spending and business regulations, restoring sound money, abolishing entire government departments, and basically … [Read More]
Back in the 1950s, when Americans knew from recent experience just how important it was to have a dominant manufacturing sector, Ike’s Defense Secretary, “Engine Charlie” Wilson, formerly of General Motors, famously declared, “What’s good for America is good for General Motors, and what’s good for General Motors is good for America.” Charlie Wilson, whose former company had turned out the … [Read More]
For decades, before a heedless congregation, some of us have preached the old Hamiltonian gospel. Great nations do not have trade partners. They have trade competitors and rivals. Trade surpluses are superior to trade deficits. Tariffs on foreign goods are preferable to taxes on U.S. producers. Manufacturing, not finance, is the muscle of the nation. Economic independence is vital to political … [Read More]